Question
problem 4
Fiscante had the machine delivered to his Trackers Raceway the place he ever used the machine. When Fiscante was unable to meet his obligations various creditors attempted to seize the lawnmower. Sears argued that because it hacd a purchase money security interest (PMSI) in the lawnmower, its interest had perfected automatically. Is Sears correct? business, Park, ohly 4. The state of Kentucky filed a tax lien against Panbowl Energy, claiming unpaid taxes. Six months later, Panbowl bought a powerful drill from Whayne Supply, making a down payment of $11,500 and signing a security agreement for the remaining debt of $220,000. Whayne perfected the next day. Panbowl defaulted. Whayne sold the drill for $58,000, leaving a deficiency of just over $100,000. The state filed suit, seeking the $58,000 proceeds. The trial court gave summary judgment to the state, and Whayne appealed. Who gets the $58,000? 5. YOU BE THE JUDGE WRITING PROBLEM Dupont Feed bought and sold agricultural products. Dupont borrowed $300,000 from Wells Fargo Bank and gave
Explanation / Answer
In this case, a secured creditor’s borrower has past tax lien filed against it by the state of Kentucky. Whayne Supply receives $58,000. Whayne Supply has a perfected Purchase Money Security Interest or PMSI, as it is commonly called in the equipment. It has a superiority over all other security interests for the drill. A PMSI is considered to be a ‘golden priority’ because the Uniform Commercial Code gives higher priority to a PMSI over conflicting security interests.
